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Javier E

Opinion | America's Irrational Macreconomic Freak Out - The New York Times - 0 views

www.nytimes.com/...ntiment-inflation-anxiety.html

bias perception economic cognitive bias psychology brain science

shared by Javier E on 02 Apr 24 - No Cached
  • The same inflationary forces that pushed these prices higher have also pushed wages to be 22 percent higher than on the eve of the pandemic. Official statistics show that the stuff that a typical American buys now costs 20 percent more over the same period. Some prices rose a little more, some a little less, but they all roughly rose in parallel.
  • It follows that the typical worker can now afford two percent more stuff. That doesn’t sound like a lot, but it’s a faster rate of improvement than the average rate of real wage growth over the past few decades.
  • many folks feel that they’re falling behind, even when a careful analysis of the numbers suggests they’re not.
  • ...16 more annotations...
  • That’s because real people — and yes, even professional economists — tend to process the parallel rise of prices and wages in quite different ways.
  • In brief, researchers have found that we tend to internalize the gains due to inflation and externalize the losses. These different processes yield different emotional responses.
  • Let’s start with higher prices. Sticker shock hurts. Even as someone who closely studies the inflation statistics, I’m still often surprised by higher prices. They feel unfair. They undermine my spending power, and my sense of control and order.
  • in reality, higher prices are only the first act of the inflationary play. It’s a play that economists have seen before. In episode after episode, surges in prices have led to — or been preceded by — a proportional surge in wages.
  • Even though wages tend to rise hand-in-hand with prices, we tell ourselves a different story, in which the wage rises we get have nothing to do with price rises that cause them.
  • But then my economist brain took over, and slowly it sunk in that my raise wasn’t a reward for hard work, but rather a cost-of-living adjustment
  • Internalizing the gain and externalizing the cost of inflation protects you from this deflating realization. But it also distorts your sense of reality.
  • The reason so many Americans feel that inflation is stealing their purchasing power is that they give themselves unearned credit for the offsetting wage rises that actually restore it.
  • younger folks — anyone under 60 — had never experienced sustained inflation rates greater than 5 percent in their adult lives. And I think this explains why they’re so angry about today’s inflation.
  • While older Americans understood that the pain of inflation is transitory, younger folks aren’t so sure. Inflation is a lot scarier when you fear that today’s price rises will permanently undermine your ability to make ends meet.
  • Perhaps this explains why the recent moderate burst of inflation has created seemingly more anxiety than previous inflationary episodes.
  • More generally, being an economist makes me an optimist. Social media is awash with (false) claims that we’re in a “silent depression,” and those who want to make American great again are certain it was once so much better.
  • in reality, our economy this year is larger, more productive and will yield higher average incomes than in any prior year on record in American history
  • And because the United States is the world’s richest major economy, we can now say that we are almost certainly part of the richest large society in its richest year in the history of humanity.
  • The income of the average American will double approximately every 39 years. And so when my kids are my age, average income will be roughly double what it is today. Far from being fearful for my kids, I’m envious of the extraordinary riches their generation will enjoy.
  • Psychologists describe anxiety disorders as occurring when the panic you feel is out of proportion to the danger you face. By this definition, we’re in the midst of a macroeconomic anxiety attack.
Javier E

Musk Peddles Fake News on Immigration and the Media Exaggerates Biden's Decline - 0 views

www.theunpopulist.net/...ddles-fake-news-on-immigration

discourse biden decline media bias hyperpartisan coverage

shared by Javier E on 28 Feb 24 - No Cached
  • There’s little indication that Biden’s remarks on this occasion—which were lucid, thoughtful, and, as Yglesias noted, cogent—or that any of the countless hours of footage from this past year alone of Biden being oratorically and rhetorically compelling, have meaningfully factored into the media’s appraisal of Biden’s cognitive state
  • Instead, the media has run headlong toward a narrative constructed by the very people politically incentivized to paint Biden in as unflattering a light as possible. When news organizations uncritically accept, rather than journalistically evaluate, the assumption that Biden is severely cognitively compromised in the first place, they effectively grant the right-wing influencers who spend their days curating Biden gaffe supercuts the opportunity to set the terms of the debate
  • Why does the media take at face value that the viral posts showcasing Biden’s gaffes and slip-ups are truly representative of his current state? 
  • ...5 more annotations...
  • Because right-wing commentators aren’t the only ones who think Biden’s mind is basically gone—lots of voters think so too
  • Of course, a major reason why the public thinks this is because the entirety of the right-wing information superstructure is devoted, on a daily basis, to depicting Biden as severely cognitively compromised
  • By contrast, most of the news sources the right sees as hyperpartisan Biden spin machines actually strain at being fair-minded and objective, which disinclines them toward producing any sort of muscular pushback against the right’s relentless mischaracterizations.
  • Since mainstream media venues by and large epistemically rely on the views of the masses to supply journalists with their coverage frames, news operations end up treating popular concerns about Biden’s age as a kind of sacrosanct window into reality rather than as a hype cycle perpetually fed into the ambient collective consciousness by anti-Biden voices intending to sink his reelection chances.
  • even if we grant every single concern that Klein and others have voiced, it is indisputably true that Joe Biden remains an intellectual giant next to Donald Trump
Javier E

Opinion | There's a Name for the Trap Joe Biden Faces - The New York Times - 0 views

www.nytimes.com/...-biden-president-election.html

escalation psychology commitment doubling-down sunk trap

shared by Javier E on 04 Jul 24 - No Cached
  • this trap: escalation of commitment to a losing course of action. In the face of impending failure, extensive evidence shows that instead of rethinking our plans, we often double down on our decisions.
  • It feels better to be a fighter than a quitter.
  • we can’t know for sure which decisions will turn out to be good. But decades of research led by the organizational psychologist Barry Staw have identified a few conditions that make people especially likely to persist on ill-fated paths.
  • ...7 more annotations...
  • Some of the worst leadership decisions of our time can be traced to escalation of commitment. Many people lost their lives because American presidents pursued a futile war in Vietnam — and continued searching for weapons of mass destruction that weren’t in Iraq.
  • Escalation of commitment helps to explain why leaders are often so reluctant to loosen their grip on power. Losing a high-status position can make them feel as if they’re losing their place in the world. It leaves them with bruised egos and wounded pride.
  • we use our big brains not to make rational decisions, but rather to rationalize the decisions we’ve already made
  • Escalation is likely when people are directly responsible for and publicly attached to a decision, when it has been a long journey and the end is in sight, and when they have reasons to be confident that they can succeed.
  • President Biden’s current situation checks all those boxes
  • the people closest to a leader are precisely the ones who are most susceptible to confirmation bias. They’re too personally invested in his success and too likely to dismiss warning signs.
  • What Mr. Biden needs is not a support network but a challenge network — people who have the will to put the country’s interests ahead of his and the skill to coldly assess his chances.
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